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Buyer’s Consolidation and BPO Services for Smooth Cross-Trade Operations
When sourcing products from multiple suppliers, transportation costs are incurred for each shipment, often leading to increased overall logistics expenses. Additionally, managing communication with multiple vendors can become time-consuming and inefficient. Buyer’s consolidation is an effective solution to these challenges. By consolidating cargo into a single container, it allows for centralized transport and management under one B/L, significantly reducing logistics costs and streamlining operations.
This column introduces Suzuyo’s buyer’s consolidation service and the related BPO (Business Process Outsourcing) support that enhances shipping efficiency.
Table of Contents
What is Buyer’s Consolidation and Its Benefits
Buyer’s consolidation is a logistics method where goods from multiple suppliers are combined into a single container and shipped together to the destination. Unlike standard LCL*1, where cargo from different shippers is combined into one container, buyer’s consolidation ensures that only the cargo belonging to the same consignee is grouped together.
*1 LCL (Less than Container Load): A shipping method in which cargo that does not fill a full container is combined with shipments from other shippers to utilize space efficiently.
Flow of buyer’s consolidation cargo
Flow of LCL cargo
Benefits of Buyer’s Consolidation
1) Cost Reduction
Under a typical procurement process, each supplier’s shipment requires separate customs clearance, incurring clearance fees each time. With buyer’s consolidation, however, all goods are combined into a single container for export from the country of origin. This enables both the cargo and documentation to be unified, allowing customs clearance to be processed as a single case. As a result, customs-related costs can be significantly reduced. Additionally, by minimizing the number of transports, overall shipping costs can also be lowered.
2) Centralized Management
In standard procurement logistics, individual shipments from multiple suppliers require separate documentation and customs procedures, which leads to a high volume of communication and complex management. Buyer’s consolidation simplifies this by combining all cargo under a single B/L, streamlining the administrative process and improving operational efficiency.
3) Reduced Risk of Damage During Transport
LCL shipments involve mixing cargo from different shippers, which increases the risk of damage or loss. With buyer’s consolidation, only the consignee’s cargo is loaded into the container, reducing the risk of cargo being damaged or misplaced.
Suzuyo’s BPO Services
Leveraging the high English proficiency in the Philippines, Suzuyo provides BPO (Business Process Outsourcing) services for shipping document preparation in cross-trade logistics. One of our key offerings is managing switch invoice operations on behalf of our customers, which is an essential requirement in many cross-trade transactions. Our team of logistics professionals overseas this process, allowing us to proactively identify potential customs-related issues. Many of our customers choose to combine these BPO services with our buyer's consolidation solutions to enhance efficiency and simplify their cross-trade logistics operations.
What is a Switch Invoice?
In cross-trade, as illustrated above, there are two sales contracts: one between the exporter (Country A) and the manufacturer (Country B), and another between the exporter (Country A) and the importer (Country C). This results in two invoices - one from the manufacturer (Country B) and one from the intermediary (Country A). The exporter (Country A) adds their margin to the manufacturer's invoice and issues a new invoice to the importer (Country C). This process is known as a switch invoice. Since the physical flow of goods and the financial transactions follow different routes in cross-trade, the documentation procedure is more complex. Outsourcing these tasks helps alleviate the administrative burden on customers, ensuring smoother operations and compliance.
Used Cases
The following is a real-world example of how a customer successfully utilized Suzuyo’s Buyer’s Consolidation and BPO services.
Customer Overview
- Industry: Manufacturing
- Products: Automotive components
Customer Challenges
- ● High logistics costs and complicated procedures due to sourcing from multiple suppliers
- ● Time-consuming invoice preparation, document matching, and financial tracking
Our Solutions
- ● By implementing Buyer’s Consolidation, the customer significantly reduced logistics costs and achieved more efficient transportation. Consolidation of cargo and documentation simplified procedures and improved overall operational efficiency.
- ● Invoice preparation through Suzuyo's BPO services reduced the customer’s operational workload and helped cut labor-related expenses
Summary
For companies aiming to reduce logistics costs and improve operational efficiency, combining Buyer’s Consolidation and BPO is a very effective solution. By using Suzuyo’s services, customers can ease their burden of logistics management and achieve smoother, more cost-efficient transportation. If you’re interested in our Buyer’s Consolidation or BPO services, or in need of logistics support in the Philippines, please don’t hesitate to contact us.